The controversial auction of thousands of pieces of Titanic memorabilia which was due to take place yesterday has been postponed.

Behind-the-scenes negotiations are said to be taking place as the owners of the £120m ($189m) lot assess the bidders.

The auction — which was due to be held at Guernsey’s Auctioneers and Brokers in New York — sparked outrage among relatives of those who died on the Titanic when it was announced.

Organisers were branded “grave robbers”, and local Titanic associations described the multi-million pound auction — scheduled to take place just four days before the centenary of the sinking — as “absolutely appalling” and “extremely insensitive”.

Relatives of those who died on Titanic accused the auction house of crass profiteering.

President of Guernsey’s, Arlan Ettinger, later apologised for causing offence to relatives, but the auction was due to go ahead. Among the more than 5,000 items salvaged from the ill-fated liner’s wreck site due to go under the hammer was a 17-tonne section of the ship known as ‘The Big Piece’.

The steel section, measuring 14ft by 23ft, broke away from the starboard side of the hull as the ship sank. There is also a selection of fine china, clothing and gold coins.

While thousands of artefacts are included in the auction, under US law they must all be sold as one lot to a buyer who agrees to maintain the collection and to allow part of it to go on public display.

The auction sparked international interest, and now it appears there’s a battle over who will get to own the collection.

A spokeswoman for Premier Exhibitions, the company which owns RMS Titanic Inc, which put the items up for auction, announced it was “in discussions with multiple parties” over the purchase of the collection.

“In order for the company to settle on the most appropriate bidder and maximise the ultimate value of the artefacts for shareholders, it will conduct these negotiations and due diligence in confidence,” she said.

“Consequently, the company will provide an additional update to shareholders as soon as practical.”